I wanted to share some of the pain I went through in installing SP1 for VS2005. The problem seems to be apparent on machines running Windows2003 which is my case.
1- link to download the service pack (http://msdn.microsoft.com/vstudio/support/vs2005sp1/)
2- you need a minimum of 3GB free space on the partition that VS2005 is installed on
3- have VS2005 source media (or its ISO image mounted in a virtual CD drive) ready in the drive
4- with Windows2003 server there is a policy issue that causes the installation to go in circles. To resolve this issue the following MS Knowledgebase article has a walkthrough to resolve the issue (http://support.microsoft.com/default.aspx/kb/925336)
5- Heath Stewart has a blog entry that explains how to slipstream SP1 into the source media of VS2005 (http://blogs.msdn.com/heaths/archive/2006/12/16/slipstreaming-visual-studio-2005-service-pack-1.aspx)
One note. Though installation of SP1 finished successfully on my development machine with Windows2003 server (after applying the KB), the installation package tried to run again after it displayed the installation successful message. I had to manually cancel the new installation.
To verify the success of the installation, the Help--> about screen should display the following version number
Version 8.0.50727.762 (SP.050727-7600)
On the bright side, VS does seem snappier at startup but its still too early to really say.
. (SP1 for vs.net doesn't include any breaking changes for the .NET framework as it doesn't install any .NET framework classes)